Toronto’s WSP Global buys Ecology & Environment

Ecology & Environment to be acquired by WSP Global for $65.1M

Ecology and Environment announced that it has entered into a definitive merger agreement with WSP Global, pursuant to which WSP will acquire E & E for cash.

EEI sold for $65.1M, Stockwinners

E & E has approximately 775 employees, predominantly in offices across the United States, with an additional presence in Latin America. With its US operations representing approximately 80% of its 2018 $US 73.5 million in net revenues, E & E’s portfolio includes work on the New York State Offshore Wind Master Plan, Climate Change Adaptation Planning in San Mateo County, California, and work on large federal programs with agencies including the US Environmental Protection Agency, the US Army Corps of Engineers, and the US Navy.

Under the terms of the agreement, E & E’s shareholders will receive $15.00 in cash, and a special dividend of up to 50c, for each share of Class A and Class B common stock they own. The special dividend is conditioned on and will be paid following the completion of the transaction and is subject to downward adjustment in certain circumstances.

WSP buys EEI for $65.1 M.

Under the terms of the Agreement, the merger consideration is approximately $US65.1 million in the aggregate, including a special dividend of approximately $US 2.2 million.

The merger agreement and the transaction have been unanimously approved by E & E’s Board of Directors.

In addition, E & E’s founders Frank Silvestro, Ronald Frank and Gerald Strobel, a trust affiliated with E & E’s late founder Gerhard Neumaier, each member of E & E’s Board of Directors and affiliates of Mill Road Capital have all signed voting agreements in support of the transaction.

The merger consideration, together with the special dividend of up to 50c, represents a premium of approximately 52.9% over E & E’s closing share price of $10.14 on August 27, 2019.

The merger agreement provides for a “go-shop” period of 30 days, during which E & E – with the assistance of Robert W. Baird & Co. Incorporated – will contact and potentially enter into negotiations with, and provide due diligence access to, third parties that offer potentially superior proposals to the proposed transaction with WSP.

E & E will have the right to terminate the merger agreement to enter into a superior proposal subject to the conditions and procedures specified in the merger agreement.

There can be no assurance this process will result in a superior proposal. E & E does not intend to disclose developments about this process unless and until the Board has made a decision with respect to any potential superior proposal.

The closing of the transaction is subject to customary closing conditions, including the approval of E & E’s shareholders and applicable regulatory approvals.

The parties are targeting a closing in the fourth quarter of calendar year 2019, subject to receipt of applicable regulatory approvals.

Alexandre L’Heureux, President and Chief Executive Officer of WSP, said, “We are pleased by the opportunity to have E & E join WSP, as we share a similar culture and strategy, centered around employees and clients. This Acquisition, which is in line with our 2019-2021 Global Strategic Plan, will enable us to increase both our Strategic Advisory Services offering and our presence in the United States, most particularly the US governmental sector. E & E, which is recognized for its expertise in environment, has built experience in sectors and services that WSP had targeted for growth, including environmental impact assessment, emergency planning and management, as well as site restoration.”

EEI is up $5.05 to $15.05.

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CBS and Viacom to merge

CBS, Viacom to combine in all-stock merger to create ViacomCBS

CBS Corp. (CBS) and Viacom (VIA, VIAB) announced they have entered into a definitive agreement to combine in an all-stock merger, creating a combined company with more than $28B in revenue.

The combined company, ViacomCBS, “will be a leading global, multiplatform, premium content company, with the assets, capabilities and scale to be one of the most important content producers and providers in the world,” the companies stated.

Viacom, an acronym of Video & Audio Communications to merge with CBS, Stockwinners

Bob Bakish, President and CEO, Viacom, will become President and Chief Executive Officer of the combined company.

Joe Ianniello, President and Acting CEO, CBS, will become Chairman and CEO of CBS and will oversee all CBS-branded assets in his new role.

CBS to merge with Viacom to compete with Disney, Netflix, Stockwinners

The merger agreement was approved by the boards of directors of both CBS and Viacom by unanimous vote of those present, upon the unanimous recommendations of the Special Committees of the CBS and Viacom Boards of Directors, respectively.

Existing CBS shareholders will own approximately 61% of the combined company and existing Viacom shareholders will own approximately 39% of the combined company on a fully diluted basis.

Under the terms of the merger agreement, each Viacom Class A voting share and Viacom Class B non-voting share will convert into 0.59625 of a Class A voting share and Class B non-voting share of CBS, respectively.

NAI, which holds approximately 78.9% and 79.8% of the Class A voting shares of CBS and Viacom, respectively, has agreed to deliver consents sufficient to assure approval of the transaction.

More than two-thirds of the CBS directors unaffiliated with NAI, and all of those unaffiliated directors who voted on the transaction, have approved the transaction, as required in order to permit NAI to consent to the transaction under the terms of the 2018 settlement agreement entered into among CBS, NAI and certain other parties thereto.

The transaction is subject to regulatory approvals and other customary closing conditions. It is expected to close by the 2019 calendar year end.

Sumner Redstone is the majority owner and chairman of the board of the National Amusements (NAI) theater chain. Through National Amusements, Redstone and his family are majority voting shareholders of CBS Corporation and Viacom (itself the parent company of Viacom Media Networks, BET Networks, and the film studio Paramount Pictures). Redstone was formerly the executive chairman of both CBS and Viacom. 

ANALYST COMMENTS

Bernstein

Bernstein analyst Todd Juenger downgraded CBS (CBS) to Underperform from Market Perform following the company’s confirmation earlier of a deal to combine in an all-stock merger with Viacom (VIAB). Any synergies produced “will pale in comparison” to inheriting Viacom’s structural problems, Juenger tells investors.

Imperial Capital

 Imperial Capital analyst David Miller lowered his price target for CBS (CBS) to $62 from $72. The analyst says that while this is generally consistent with where both names had been trading for the last 90 days, the ratio is below what he had been hoping for from the Viacom side, which was a ratio of 0.7. Nonetheless, Miller keeps an Outperform rating on shares of CBS.

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Wesco Aircraft sold for $1.9 billion

Wesco Aircraft to be acquired by Platinum Equity affiliate for $1.9B

Wesco Aircraft sold to Carlyle Group affiliate, Stockwinners

Wesco Aircraft Holdings (WAIR) announced that it has entered into a definitive merger agreement to be acquired by an affiliate of Platinum Equity in a transaction valued at approximately $1.9B.

Upon closing, Wesco will be combined with Platinum Equity portfolio company Pattonair, a provider of supply chain management services for the aerospace and defense industries based in the United Kingdom.

Under the agreement, which has been unanimously approved by Wesco’s Board of Directors, Wesco shareholders would receive $11.05 per share in cash.

The cash purchase price represents a premium of approximately 27.5 percent to the 90-day volume weighted average share price for the period ended May 24, 2019, the last trading day prior to media speculation regarding a potential transaction involving Wesco Aircraft.

Wesco’s three largest shareholders, affiliates of The Carlyle Group (CG) and Makaira Partners, as well as the Snyder Family Trusts, support the transaction and have entered into voting and support agreements to vote their shares in favor of the transaction.

CG to buy Wesco Aircraft, Stockwinners

The transaction will be financed through a combination of committed equity financing provided by affiliates of Platinum Equity Capital Partners IV, L.P., as well as debt financing that has been committed to by Bank of America Merrill Lynch.

The transaction is expected to be completed by the end of calendar 2019 and is subject to Wesco shareholder approval, regulatory clearances and other customary closing conditions.

Upon the completion of the transaction, Wesco will become a privately held company, and shares of its common stock no longer will be listed on any public market.

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Cambrex sold for $2.4 billion

Cambrex to be acquired by Permira Funds for $60.00 per share in cash, or $2.4B

Cambrex sold for $2.4 billion, Stockwinners

Cambrex (CBM) announced that it has signed a definitive agreement to be acquired by an affiliate of the Permira funds in a transaction valued at approximately $2.4B, including Cambrex’s net debt.

Under the terms of the merger agreement, Cambrex shareholders will receive $60.00 in cash for each share of Cambrex common stock, which represents a 47.1% premium to the August 6 closing stock price and a 37.3% premium to the 60-day volume weighted average closing price leading up to this announcement.

Completion of the transaction is subject to customary closing conditions, including receipt of approval by Cambrex’s shareholders and customary regulatory approvals. Closing is expected to occur during the fourth quarter.

Permira goes shopping, Stockwinners

The transaction will be financed through a combination of debt and equity financing.

Cambrex Corporation provides various products and services for the development and commercialization of new and generic therapeutics worldwide. Its products comprise active pharmaceutical ingredients and pharmaceutical intermediates that are used in the production of prescription and over-the-counter drug products, as well as finished dosage forms.

The company serves generic drug companies; and companies that discover and commercialize small molecule human therapeutics. The company sells its products directly, as well as through independent agents. 

Cambrex announced that it will not hold a second quarter 2019 earnings conference call and will not update previously provided financial guidance given the pending acquisition.

The Permira investment team advises the Permira Funds. The investment team identifies long-term macro trends to back, across five key sectors including healthcare. Healthcare is one of the World’s largest industries, spanning hundreds of sub-sectors (e.g., from Biotechnology to Heavy Medical Equipment, from Hospitals to Veterinary medicine). It has the potential to create significant value for its customers through improving the human experience but its costs are also potentially limitless. The sector’s fundamental trends and complexity along with its scale generate attractive investment opportunities.

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Exotic Metals sold for $1.725B

Parker-Hannifin to acquire Exotic Metals for $1.725B in cash

Exotic Metals sold to Parker Hannifin, Stockwinners

Parker Hannifin Corporation (PH) announced that it has entered into a definitive agreement to acquire Exotic Metals Forming Company LLC for $1.725B in cash. When adjusted for approximately $170M of expected tax benefits, the net transaction value is approximately $1.56B.

Parker enters exotic metals business, Stockwinners

The transaction has been approved by the Board of Directors of each company and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

Exotic Metals, headquartered in Kent, Washington, is a privately held company founded in 1966 that designs and manufactures innovative and technically demanding, high temperature, high pressure air and exhaust management solutions for aircraft and engines.

Exotic Metals has expected annual sales of approximately $450M and employs 1,600 team members across three locations in the United States.

Exotic Metals has long-term agreements in place across high growth aerospace programs.

Exotic Metals makes the exhaust cone for GE engines, Stockwinners

Parker also expects growth synergies through cross-selling opportunities and leveraging Parker’s strong aftermarket position.

Parker expects to realize approximately $13M in pre-tax run-rate synergies by fiscal year 2023 by combining supplier networks and implementing Win Strategy initiatives. The cumulative cost to achieve these synergies is expected to be approximately $5M.

The transaction is expected to be accretive to Parker’s organic growth, EBITDA margins, EPS and cash flow, after adjusting for one-time costs, and to achieve high single-digit ROIC in year five with continued expansion.

Upon the closing of this transaction, Parker plans to have Exotic Metals operate as a standalone division within Parker’s Aerospace Group, which is led by Roger Sherrard, Vice President and President Aerospace Group.

Exotic Metals manufactures the intake blades for GE engines, Stockwinners

Parker plans to finance the transaction using new debt.

Following the completion of the transaction, Parker expects to maintain a high investment grade credit profile.

The transaction is not expected to impact Parker’s dividend payout target of approximately 30-35% average percent of net income over a five-year period, while maintaining its record of annual dividend increases.

The transaction is expected to be completed within the next two to three months and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

PH last traded at $172.46, down $2.45.

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Tenet to spin off its Conifer Health

Tenet concludes Conifer strategic review, to complete spin-off by end of 2Q21

Tenet Healthcare (THC) announced its intention to pursue a tax-free spin-off of its Conifer business as a separate, independent publicly traded company.

Tenet to spinoff Conifer Health in a tax free transaction, Stockwinners

The company expects to complete the spin-off by the end of the second quarter of 2021.

This announcement is the culmination of the Conifer strategic review process announced in December 2017.

Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “After an extensive review of Conifer’s strategic alternatives, in which we evaluated multiple options for the business while simultaneously driving significant and sustainable improvements in performance, we are pleased to announce plans to spin off Conifer into a separate, publicly traded company.

This decision supports our longstanding objectives to maximize the value of Conifer, build on its strong growth potential and deliver the best outcome for Conifer and for Tenet shareholders.” Rittenmeyer continued, “Conifer has unmatched experience and scale in offering revenue cycle management solutions for healthcare providers and a proven track record of delivering high-touch, high-value services to clients.

Tenet to spin off Conifer Health, Stockwinners

Pursuing a tax-free spin-off is an important step forward in Conifer’s evolution, and we believe the business is well-positioned to capitalize on its growth opportunities as a standalone company.”

Rittenmeyer added, “We were pleased with Tenet’s performance in the second quarter, with Adjusted EBITDA comfortably within our Outlook range and consistent with consensus estimates.

Volume growth strengthened in our hospital business, with increases in both admissions and adjusted admissions. USPI also delivered favorable volume growth and Conifer had another strong quarter.

We remain excited about the future of our healthcare services offerings at our 65 hospitals and approximately 500 outpatient centers which will remain part of the Tenet enterprise.”

The separation process will include a thorough review of the necessary executive leadership changes, Board membership needs and key commercial milestones that Conifer must achieve in order to provide the optimal governance structures and business foundations for a successful public company.

Specific details about these actions and milestones will be made available in due course.

Among other things, the spin-off will be subject to finalization of the entity structure of the spun-off business, assurance that the separation will be tax-free to Tenet’s shareholders for U.S. federal income tax purposes, executing a restructured services agreement between Conifer and Tenet, finalization of Conifer’s capital structure, the effectiveness of appropriate filings with the Securities and Exchange Commission, final approval from the Tenet Board of Directors, and other customary conditions.

The spin-off will not require a vote by Tenet shareholders and is supported by Common Spirit which owns a minority interest in Conifer Health Solutions, LLC.

The transaction is being targeted for completion by the end of the second quarter of 2021, but there can be no assurance regarding the timeframe for completing the spin-off, the allocation of assets and liabilities between Tenet and Conifer, or that the spin-off will be completed at all.

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Vail Resorts buys Peak Resorts for $11.00 per share

The deal is valued about $170 million

Peak Resorts (SKIS) announced that it has entered into a definitive merger agreement with Vail Resorts, Inc. (MTN) pursuant to which Vail Resorts will acquire all outstanding shares of common stock of Peak Resorts for $11.00 per share in cash.

Vail Resorts to buy Peak Resorts, Stockwinners

The transaction represents a 116% premium to Peak Resorts’ closing stock price on July 19, 2019.

The transaction is expected to close in fall 2019 and is subject to certain conditions, including a vote of Peak Resorts shareholders and antitrust clearance.

Vail Resorts buys Peak Resorts, shares jump. Stockwinners

The transaction was approved by the Boards of Directors of both companies. Peak Resorts’ Board of Directors also recommends that the Company’s shareholders approve the transaction.

Moelis & Company LLC is serving as financial advisor to Peak Resorts. Perkins Coie LLP, Sandberg Phoenix & von Gontard P.C. and Armstrong Teasdale LLP are serving as legal counsel to Peak Resorts.

About the Companies

Peak Resorts, Inc. owns, operates, and leases day and overnight drive ski resorts in the United States. Its resorts activities and amenities include skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction, golf, zip lines, mountain coasters, mountain biking, hiking, paint ball, and other summer activities. It operates 17 ski resorts primarily located in the Northeast, Mid-Atlantic, and Midwest.

Vail Resorts has been on a shopping spree, Stockwinners

Vail Resorts, Inc. operates mountain resorts and urban ski areas in the United States. The company operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates 11 mountain resorts, including Vail Mountain, Breckenridge Ski, Keystone, and Beaver Creek resorts in Colorado; Park City resort in Utah; Heavenly Mountain, Northstar, and Kirkwood Mountain resorts in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in Canada; Stowe Mountain resort in Vermont; and Perisher in Australia, as well as 3 urban ski areas, such as Wilmot Mountain in Wisconsin, Afton Alps in Minnesota, and Mount Brighton in Michigan.

Vail Resorts expands its footprint by purchasing Peak Resorts, Stockwinners

Its resorts offer various winter and summer recreational activities. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company’s mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 5,400 owned and managed hotel and condominium units.

The Real Estate segment owns, develops, and sells real estate properties in and around the company’s resort communities. 

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Netflix, a battle of bulls and bears!

Netflix lost more than $18 billion in market capitalization in 2 days

Disney loss having minimal impact on Netflix subscribers. See Stockwinners.com Market Radar to read more
Netflix subscribers grew less than expected. Stockwinners

On Wednesday, Netflix (NFLX) reported 2nd Quarter June 2019 earnings of $0.60 per share on revenue of $4.9 billion. The consensus earnings estimate was $0.56 per share on revenue of $4.9 billion. Revenue grew 26.0% on a year-over-year basis.

The company said in its shareholders letter it expects third quarter earnings of approximately $1.04 per share on revenue of approximately $5.25 billion. The current consensus earnings estimate is $1.04 per share on revenue of $5.25 billion for the quarter ending September 30, 2019.

Bears vs Bulls, Stockwinners

The company saw its first loss in US subscribers last quarter, and a 2.7 million paid customers added globally, nearly half of what was forecast.

Competition

At the same time, the company is facing a steeper path than ever in the United States. Netflix lost subscribers this quarter for the first time in years, a combination of the price hike and a content loss. As the US market becomes oversaturated with streaming services — with WarnerMedia, Disney, and Apple all launching streaming services — the only way to ensure growth is going outside the United States. Netflix currently has 60 million paying domestic subscribers, and company believes they can get to 90 million, but the risk of market saturation is real, and raises difficult questions for the company’s content strategy.

BMO Capital

BMO Capital analyst Daniel Salmon lowered his price target on Netflix (NFLX) to $440 after its reported shortfall on subscriber addition in Q2, which he expects to “fuel the debate” about the company’s pricing power and the role of new content. Given the sequential decline in its U.S. markets and the approaching launch of Disney+ (DIS), the analyst contends that this may be a “more than just the usual” earnings-miss driven debate. Longer term however, Salmon believes that the company’s revenue trend remains on track, keeping his Outperform rating on the stock and recommending Netflix, Amazon (AMZN), and Disney as a “collective investment” in the global streaming race.

Credit Suisse

Credit Suisse analyst Douglas Mitchelson lowered his price target for Netflix to $440 from $450 after the company posted its worst subscriber miss ever, short by 2.3M net adds, while revenue was in line and EBIT well ahead. The analyst reiterates an Outperform rating on the shares.

Disney to end Netflix distribution agreement in 2019. See Stockwinners.com Market Radar for details
Disney ended Netflix distribution agreement this year. See Stockwinners.com

Deutsche Bank

Deutsche Bank analyst Bryan Kraft views post-earnings selloff in shares of Netflix as a buying opportunity. The analyst keeps a Buy rating on the streaming service.

KeyBanc

KeyBanc analyst Andy Hargreaves says that despite soft Q2 results, he believes Netflix retains competitive advantages that should support excellent revenue and profit growth well into the future. The likely decline in the stock price improves the risk/reward, but increased confidence in the potential for upside to his estimates is likely needed for a more positive view of the shares, he contends. Hargreaves reiterates a Sector Weight rating on the shares.

WarnerMedia streaming service hurts Netflix, Stockwinners

JPMorgan

JPMorgan analyst Doug Anmuth to $425 from $450 while keeping an Overweight rating on the shares. The Q2 net adds miss was meaningful, but the company’s Q2 results are often volatile and this quarter contained a number of moving pieces, Anmuth tells investors in a research note. Netflix’s back half of the year content slate is strong and the company is seeing significantly better trends quarter-to-date, adds the analyst. History suggests that Q2 is a “difficult quarter from which to extrapolate NFLX’s trajectory,” says Anmuth.

Stifel

Stifel analyst Scott Devitt said Netflix shares may be range bound until the company reports Q3 earnings following its miss in Q2 on its domestic and international paid net sub add guidance. He believes management’s explanations for the current quarter miss “appear reasonable,” though Netflix “will have to prove, as it has done many times, that its value proposition remains one of the best,” Devitt tells investors in a post-earnings research note. Following last night’s report, Devitt lowered his price target on Netflix shares to $400 from $425 and keeps a Buy rating on the stock.

Wedbush

Wedbush analyst Michael Pachter raised his price target for Netflix to $188 from $183, while reiterating an Underperform rating on the shares after the company reported quarterly results. The analyst expects content spending to trigger substantial cash burn for many years, and notwithstanding four Netflix price increases in the last five years, he notes that cash burn continues to grow. Content migration and price hikes could cause a deceleration in subscriber growth, and consistently negative free cash flow makes DCF valuation impossible, he adds.

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Carrizo Oil & Gas sold for $3.2 billion

Callon Petroleum to acquire Carrizo Oil & Gas in all-stock deal valued at $3.2B

Carrizo sold for $3.2 billion, Stockwinners

Callon Petroleum (CPE) and Carrizo Oil & Gas (CRZO) announced that their Boards of Directors have unanimously approved a definitive agreement under which Callon will acquire Carrizo in an all-stock transaction valued at $3.2B.

This highly complementary combination will create a leading oil and gas company with scaled development operations across a portfolio of core oil-weighted assets in both the Permian Basin and Eagle Ford Shale.

Callon Petroleum buys Carrizo for $3.2B, Stockwinners

Under the terms of the agreement, Carrizo shareholders will receive a fixed exchange ratio of 2.05 Callon shares for each share of Carrizo common stock they own.

This represents $13.12 per Carrizo share based on Callon’s closing common stock price on July 12 and a premium of 18% to Carrizo’s trailing 60-day volume weighted average price.

Following the close of the transaction, Callon shareholders will own approximately 54% of the combined company, and Carrizo shareholders will own approximately 46%, on a fully diluted basis.

The all-stock transaction is intended to be tax-free to Carrizo shareholders.

The transaction has been unanimously approved by the Boards of Directors at both Callon and Carrizo.

In addition, each of the Carrizo directors has committed to vote his or her shares in favor of the transaction.

Upon closing, the Board of Directors of the combined company will consist of 11 members, including Callon’s eight current Board members and three to be appointed from the Board of Carrizo.

The combined company will be led by Callon’s executive management team and will remain headquartered in Houston, Texas.

The transaction, which is expected to close during the fourth quarter, is subject to customary closing conditions and regulatory approvals, including the approval of shareholders of both companies.

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Milacron sold for $2 billion

Hillenbrand to acquire Milacron in cash, stock deal valued around $2B

Milacron sold for $2 billion, Stockwinners

Hillenbrand (HI) and Milacron (MCRN) announced that they have entered into a definitive agreement under which Hillenbrand will acquire Milacron in a cash and stock transaction valued at approximately $2B, including net debt of approximately $686M as of March 31.

Under the terms of the agreement, which has been unanimously approved by the boards of both companies, Milacron stockholders will receive $11.80 in cash and a fixed exchange ratio of 0.1612 shares of Hillenbrand common stock for each share of Milacron common stock they own.

Based on Hillenbrand’s closing stock price on July 11, the last trading day prior to the announcement, the implied cash and stock consideration to be received by Milacron stockholders is $18.07 per share, representing a premium of approximately 34% to Milacron’s closing stock price on July 11, and a premium of approximately 38% to Milacron’s 30-day volume-weighted average price as of the close on July 11.

Hillenbrand pays $2 billion to buy one of its suppliers, Stockwinners

Upon closing, Hillenbrand shareholders will own approximately 84% of the combined company, and Milacron stockholders will own approximately 16%.

Milacron will benefit from the Hillenbrand Operating Model, or HOM, and Hillenbrand expects to leverage Milacron’s global shared services center to drive operational efficiency.

The transaction is expected to generate annualized, run-rate cost synergies of approximately $50M within three years following close, primarily through reducing public company costs, realizing operating efficiencies, and capturing direct and indirect spend opportunities.

The transaction is also expected to generate revenue synergies, driven by opportunities to cross-sell extruder and material handling equipment, and to leverage the combined service footprint to further penetrate the product aftermarket.

These efficiencies will be driven across the combined organization through utilizing the HOM, while maintaining a commitment to serving customers with excellence and innovation.

The transaction, which is expected to close in Q1 of 2020, is subject to customary closing conditions and regulatory approvals, including the approval of stockholders of Milacron.

About the Companies

Hillenbrand, Inc. operates as a diversified industrial company in the United States and internationally. The company operates in two segments, Process Equipment Group and Batesville. The Process Equipment Group segment designs, engineers, manufactures, markets, and services process and material handling equipment and systems for various industries, including plastics, food and pharmaceuticals, chemicals, fertilizers, minerals and mining, energy, wastewater treatment, forest products, and other general industrials.

Milacron Holdings Corp. manufactures, distributes, and services engineered and customized systems within the plastic technology and processing industry in the United States and internationally. 

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Acacia Communications sold for $2.6B

Cisco to acquire Acacia Communications for $70.00 per share in cash

Acacia Comms tumbles, Stockwinners.com
Acacia Comms. sold to Cisco, Stockwinners.com

Cisco (CSCO) and Acacia Communications (ACIA) announced they have entered into a definitive agreement under which Cisco has agreed to acquire Acacia.

An existing Cisco supplier, Acacia designs and manufactures high-speed, optical interconnect technologies that allow web scale companies, service providers, and data center operators to meet the fast-growing consumer demands for data.

Cisco buys Acacia Comms. at a 47% premium, Stockwinners

Under the terms of the agreement, Cisco has agreed to acquire Acacia for $70.00 per share in cash, or for approximately $2.6B on a fully diluted basis, net of cash and marketable securities.

The acquisition is expected to close during the second half of Cisco’s FY2020, subject to customary closing conditions and required regulatory approvals.

Cisco, whose equipment makes up the backbone of the internet and corporate networks, has recently rekindled growth by revamping existing products and adding new software and services under a corporate makeover by Chief Executive Officer Chuck Robbins. In May, the company gave a bullish sales and profit forecast for the current period, a sign that corporations continue to spend on computer networks despite the trade dispute between China and the U.S.

Bill Gartner, who heads Cisco’s Optical Systems and Optics, wrote that Acacia’s products “are designed to transform communications networks through improvements in performance, capacity and cost.” He added that Acacia’s coherent optics technology will build on Cisco’s strength in optical, silicon, and software technologies.

Upon completion of this transaction, Acacia employees will join Cisco’s Optical Systems and Optics business within the networking and security business under David Goeckeler.

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Pancreatic cancer data sends shares of Tyme Technologies higher

Tyme Technologies presents updated data from TYME-88-Panc Phase II study

Tyme Techs. shares jump of data, Stockwinners

Tyme Technologies (TYME) announced that its multicenter open-label Phase II TYME-88-Panc study evaluating SM-88 as an oral monotherapy in patients with advanced pancreatic cancer continues to demonstrate encouraging results and a well-tolerated safety profile.

The data from the TYME-88-Panc study were presented at the European Society of Medical Oncology 21st World Congress on Gastrointestinal Cancer.

The Annual meeting is held in Barcelona this year, Stockwinners

Updated results from the ongoing multicenter open-label Phase II TYME-88-Panc study involved 49 heavily pretreated patients with radiographically progressive metastatic pancreatic cancer who had significant disease related morbidity before receiving TYME’s investigational agent SM-88.

More than 80% of patients had received at least two prior lines of therapy. Of the 49 patients, 38 patients were evaluable for efficacy, as defined in the protocol.

Pancreatic cancer, Stockwinners

TYME-88-Panc is a two-part study in which Part 1 was intended to determine optimal dosing and assess if early clinical benefit supported further development of SM-88 in pancreatic cancer.

This study is being performed under a TYME IND with input from the FDA prior to study initiation. In this study, based on information available as of April 25, 2019, the median overall survival of evaluable patients was 6.4 months.

Certain efficacy indicators correlate A RECIST clinical benefit rate of stable disease or better was achieved by 44% of patients with available imaging. Notably, patients achieving stable disease or better demonstrated a statistically significant improvement in survival with a 92% reduction in risk of death.

The CBR was durable with majority of these patients remaining in stable disease or better at more than 7 months after receiving treatment with SM-88.

The measurement of CTCs is emerging as an important prognostic indicator in patients with pancreatic cancer. This is now the second TYME study in cancer patients showing that SM-88 reduces CTCs.

In a previous study of patients with prostate cancer, SM-88 treatment was also associated with a reduction in CTC count. In the TYME-88-Panc study, a median reduction of 63% in CTC burden was observed in evaluable patients. Importantly, patients with available results reaching an 80% reduction or greater in CTCs demonstrated a 60% decrease in risk of death.

In addition to these findings from the TYME-88-Panc study, data were also presented on subgroup analyses. TYME identified several screening criteria that were associated with rapidly declining prognostic factors defined as greater than 2 lines of prior therapy; age greater than 75 years old; albumin less than 3.5 g/dl. Patients with no indicators of poor prognosis had a better trend in survival.

TYME identified key sub-groups of patients who performed better. Patients with 1 or 2 prior lines of therapy had a better trend in survival. Female patients had a statistically significant trend toward better survival. These encouraging findings warrant further clinical evaluation of these subgroups. As of April 25, 2019, the study reported that SM-88 was well tolerated with only 4.0% of patients who experienced serious adverse events deemed at least possibly related to SM-88. One patient with reported SAEs continued on treatment.

The TYME-88-Panc research results are from an investigational study. SM-88 is not approved for the treatment of patients with any disease condition.

TYME is up 30 cents to $1.52.

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Ford launches new business model in Europe

Ford to cut 12,000 jobs in Europe by end of 2020

Ford to realign its European operations, Stockwinners

Ford (F) said in a statement that it is launching a new business model and fresh vehicle line-up as part of the most comprehensive redesign in the history of its business in Europe.

The company also is on track to significantly improve its financial results in Europe this year, paving the way to sustainable profitability and its longer-term goal of delivering a 6% EBIT margin.

The new European operating model and resulting organization are effective July 1.

Three new business groups – Commercial Vehicles, Passenger Vehicles and Imports – are being established to facilitate fast decision-making centered on customer needs, Ford said.

Ford Kuga will now be manufactured in China instead of Europe, Stockwinners

Ford is freshening and expanding its vehicle line-up in Europe, introducing at least three new nameplates in the next five years as it continues to grow its utility vehicle portfolio, including the all-new Mustang-inspired fully electric performance utility.

The new nameplates are in addition to all-new Kuga, Puma and Explorer Plug-In Hybrid coming by early 2020.

Manufacturing efficiency is being improved through the previously announced proposed or confirmed closure or sale of six assembly and component manufacturing plants by the end of next year: Proposed closure of Bridgend Engine Plant in South Wales; Closure of Ford Aquitaine Industries Transmission Plant in France; Closure of Naberezhnye Chelny Assembly, St. Petersburg Assembly and Elabuga Engine Plant in Russia; Sale of the Kechnec Transmission Plant in Slovakia to Magna.

This Ford Mustang designed for the European market, Stockwinners

As a result, Ford’s manufacturing footprint in Europe will be reduced to a proposed 18 facilities by the end of 2020, from 24 at the beginning of 2019.

In the U.K., the Ford of Britain and Ford Credit Europe headquarters in Warley also will close later this year and operations consolidated in Dunton.

In addition, Ford is implementing shift reductions at its assembly plants in Saarlouis, Germany, and Valencia, Spain, as well as a more streamlined management structure and marketing and sales operations.

In total, approximately 12,000 jobs will be impacted at Ford’s wholly owned facilities and consolidated joint ventures in Europe by the end of 2020, primarily through voluntary separation programs.

Around 2,000 of those are salaried positions, which are included among the 7,000 salaried positions Ford is reducing globally.

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Allergan sold for $63 billion

AbbVie to acquire Allergan in cash, stock deal valued around $63B

Watch Allergan into better botox data. See Stockwinners.com
Allergan sold for $63 billion, Stockwinners

AbbVie (ABBV) and Allergan (AGN) announced that the companies have entered into a definitive transaction agreement under which AbbVie will acquire Allergan in a cash and stock transaction for a transaction equity value of approximately $63B, based on the closing price of AbbVie’s common stock of $78.45 on June 24.

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Abbvie to pay $63B to buy Allergan, Stockwinners

Upon completion of the transaction, AbbVie will continue to be incorporated in Delaware as AbbVie Inc. and have its principal executive offices in North Chicago, IL.

AbbVie will continue to be led by Richard Gonzalez as chairman and CEO.

Two members of Allergan’s board, including chairman and CEO, Brent Saunders, will join AbbVie’s board upon completion of the transaction.

Under the terms of the Transaction Agreement, Allergan Shareholders will receive 0.8660 AbbVie Shares and $120.30 in cash for each Allergan Share that they hold, for a total consideration of $188.24 per Allergan Share.

The transaction represents a 45% premium to the closing price of Allergan’s Shares on June 24.

AbbVie anticipates that the Acquisition will provide annual pre-tax synergies and other cost reductions of at least $2B in year three while leaving investments in key growth franchises untouched.

Botox is one of Allergan’s leading products, Stockwinners

The synergies and other cost reductions will be a result of optimizing the research and early stage portfolio, and reducing overlapping R&D resources, driving efficiencies in SG&A, including sales and marketing and central support function costs, and eliminating redundancies in manufacturing and supply chain, and leveraging procurement spend.

The synergies estimate excludes any potential revenue synergies.

AbbVie is expected to generate significant annual operating cash flow, which will support a debt reduction target of $15B to $18B before the end of 2021, while also enabling a continued commitment to Baa2/BBB or better credit rating and continued dividend growth.

It is expected that, immediately after the closing of the Acquisition, AbbVie Shareholders will own approximately 83% of AbbVie on a fully diluted basis and the Allergan Shareholders will own approximately 17% of AbbVie on a fully diluted basis.

PIPER COMMENTS

Piper Jaffray analyst Christopher Raymond said his first reaction to the deal could be summed up with the phrase “two turkeys don’t make an eagle,” but he is “willing to listen” despite his skepticism about the transaction.

Though he cannot say he is “excited at the prospect of AbbVie entering the field of medical aesthetics,” EPS accretion of 10% in year one and over 20% at peak, and the potential for meaningful deleveraging and cost cutting, has his attention, Raymond said. He keeps a Neutral rating on AbbVie based on his initial reaction to the deal announcement.

Humira is AbbVie’s blockbuster drug, Stockwinners

Wells Fargo

Wells Fargo analyst David #Maris said he views the deal as a good alternative for Allergan versus the current share price, but he is not convinced its a better long term alternative given the eventual biosimilar threat to Abbvie’s blockbuster drug Humira.

With that said, Maris tells investors that “deals at such premiums are rarely killed because of a bad strategic fit or longer -term value outlook in the absence of other bidders.” Though he would not completely rule out an activist investor disrupting the deal, he thinks it is unlikely given there has been a strategic review of the company for some time. Maris, who said he thinks the deal could go through, keeps an Outperform rating on Allergan shares.

Leerink 

SVB Leerink analyst Marc Goodman is not surprise that one of the large pharma companies has made a bid on Allergan (AGN) given the multi-year stock weakness.

Juvederm is another one of Allergan’s top selling products. Stockwinners

However, he believes a $188 price is “too low,” as he “can’t believe that Allergan is not being taken out at least at $200,” which “begs the question” whether this was a process or is AbbVie (ABBV) “opportunistically pursuing a wounded stock.” If it is the latter, Goodman believes this bid could initiate others to pursue Allergan as well. He has an Outperform rating on Allegan’s shares.

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Caesars Entertainment sold for $17.3 B

Eldorado Resorts to acquire Caesars for $12.75 per share, or about $17.3B

Eldorado Resorts to buy Caesars for $17.3B, Stockwinners

Eldorado Resorts (ERI) and Caesars Entertainment (CZR) announced that they have entered into a definitive merger agreement to create the largest U.S. gaming company.

Caesars Entertainment sold for $17.3 billion, Stockwinners

Eldorado will acquire all of the outstanding shares of Caesars for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares of Eldorado common stock for each Caesars share of common stock based on Eldorado’s 30-calendar day volume weighted average price per share as of May 23, reflecting total consideration of approximately $17.3B, comprised of $7.2B in cash, approximately 77M Eldorado common shares and the assumption of Caesars outstanding net debt.

Caesars shareholders will be offered a consideration election mechanism that is subject to proration pursuant to the definitive merger agreement.

Giving effect to the transaction, Eldorado and Caesars shareholders will hold approximately 51% and 49% of the combined company’s outstanding shares, respectively.

Upon completion of the transaction the combined company will retain the Caesars name to capitalize on the value of the iconic global brand and its legacy of leadership in the global gaming industry.

The new company will continue to trade on the Nasdaq Global Select Market.

The combined company’s Board of Directors will consist of 11 members, six of whom will come from Eldorado’s Board of Directors and five of whom will come from Caesars Board of Directors.

The transactions have been unanimously approved by the Boards of Directors of Eldorado, Caesars and VICI.

The Caesars transaction is subject to approval of the stockholders of Eldorado and Caesars, the approval of applicable gaming authorities, the expiration of the applicable Hart-Scott-Rodino waiting period and other customary closing conditions, and is expected to be consummated in the first half of 2020.


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